2G directions implemented, centre tells SC

New Delhi, Nov 22 (IANS) The government Thursday told the Supreme Court that it had acted "fully in accordance" with its judgment on the auction of cancelled 2G licences.

The government, in an affidavit, said that its decision on the auction was also influenced by market dynamics in telecom sector.

Telecom Secretary R. Chandrashekhar told the court that "the decision as to the quantum of spectrum to be placed in auction may also be appreciated in the context of the market dynamics operating in the telecom sector".

Defending the decision not to put up the entire spectrum for auction, the affidavit said that the government decision to auction 390 MHz of spectrum as against 473.6 MHz that became available following the cancellation of 122 2G licenses in February had been taken for "cogent and valid reasons".

It said that the decision to put only 390 MHz to auction Nov 12−14 was taken after the government held extensive consultation on the telecom regulator's recommendation.

"The realisation of optimal revenue by the government in public interest requires a judicious decision regarding the balance between demand and supply of spectrum in the auction process," Chandrashekhar said in his affidavit.

The affidavit said that several of the operators whose licences had been quashed by the Supreme Court were already in the process of winding up their business and had conveyed their intention to do so.

This was further underlined by the participation of only three new entrants in the auction, that too in only a limited number of service areas, the affidavit said.

Explaining the market dynamics in the telecom sector, the affidavit said that "out of the eight entities whose licenses stood quashed by the apex court's Feb 2 order, only two entities and one further entity which was a shareholder in an entity whose licence had been quashed decided to participate in the auction."

Chandrashekhar filed the affidavit in pursuance to the Nov 19 direction of the apex court when it declined to entertain affidavit filed by an under secretary.

The affidavit said that, effectively, out of the 122 licences that were issued in pursuance of the Jan 10, 2008, press release only 54 belonged to entities that decided to participate in the auction.

In the result, all entities that bid for the spectrum put to auction Nov 12 by the government have secured the same number of licences.

The affidavit said that the "TRAI has faithfully discharged its mandate under Section 11 of the TRAI Act, 1997 in the interests of the telecom sector as a whole even though such interests may not always be the same as those of each individual stakeholder".

The court was told that the government would take further steps in pursuance to the auction that concluded Nov 14.

The government, the affidavit said, was "separately examining the further steps to be taken with regard to auction/allocation of available spectrum progressively, including spectrum that will become available in the 900 MHz band on the expiry of the current duration of licences".